San Antonio nonprofit, developer sell near East Side apartment building

The Baldwin at St. Paul Square was developed with the help of the San Antonio Housing Trust Public Facility Corp., a semi-autonomous city nonprofit.

Photo: William Luther /San Antonio Express-News

The Baldwin at St. Paul Square, a mixed-income apartment complex spearheaded by a city nonprofit and Ohio-based developer NRP Group, is set to be sold for $62 million.

The 271-unit complex at 239 Center St., which opened last year, will be bought by Virtus Real Estate Capital, an Austin firm that provided equity for the project.

The San Antonio Housing Trust Public Facility Corp., a largely autonomous nonprofit overseen by five city council members, partnered with NRP Group to build it.

With the deal expected to close Sunday, the housing trust — which has a small ownership stake in the project and owns the land it sits on — decided Tuesday to take a slice of the rent over the decades remaining on the lease, or $37 million, which is worth about $6.3 million in today’s dollars.

With the sale, the organization had two options: take 10 percent of the net proceeds after the debt is paid off and other conditions met, or a one-time payment of around $950,000, or take part of the rent during the 72 years remaining on the 75-year lease.

NRP Group will own 10 percent and continue managing the complex.

The housing trust has become one of San Antonio’s most prolific creators of affordable housing since its formation in 2009. It partners with developers and keeps an ownership stake in projects, buys the land and leases it back for up to 75 years.

The nonprofit’s involvement means the projects are exempt from property taxes. In exchange, developers must rent half the units to residents making 80 percent of the area median income, or $56,800 for a family of four in the San Antonio-New Braunfels metropolitan area.

Half of the apartments at the Baldwin are reserved for residents at that income level and the rest are market-rate units.

The apartments deemed affordable would remain at that income level with the sale, said Jim Plummer, an attorney for the housing trust.

The Baldwin project received $626,202 in fee waivers, including a $500,000 San Antonio Water System waiver, as part of the Center City Housing Incentive Program.

The developers negotiated changes in the agreement with the housing trust in the unlikely event that state lawmakers do away with the tax exemption for affordable housing.

The nonprofit assumes the risk for the first five years of the lease, Plummer said. After that, if the Legislature cuts the tax exemption, the partners have the option to buy out the housing trust — for a sum that’s equal to the taxes from the first day of the project to when the law changes, subtracting any payments made to the trust.

The partners could rent the apartments at market rates at that point, and the project would be taxed.

“If they buy us out of the deal, it would be as though the property tax exemption never happened, and that’s what they would have to pay us,” Plummer said.

Madison Iszler covers manufacturing, technology and other business topics for the San Antonio Express-News.

Before joining the Express-News, Madison covered retail, small businesses and other topics at the Albany Times Union and worked on a project about Social Security disability benefits. She also worked as a general assignment reporter at the Raleigh News & Observer and wrote a two-part series about the state’s farm workers.